Q2 nonresidential construction index falls slightly but remains in expansion mode

FMI’s Non-residential Construction Index (NRCI), a measure of construction industry leader sentiment, declined slightly to 53.4 in Q2 2026, down from 54.5 in Q1.

Although economic sentiment moderated across most components, as measured by the views of construction industry leaders, it remained in expansion territory. Expectations for their own construction businesses remained the strongest component at 65.2, down from 67.1 in Q1.

Construction activity in their local markets was essentially flat at 58.9. Backlog expectations pulled back to 64.3 from 70.4, though still well into expansion territory and signaling solid workload visibility. 

Cost input indicators continued to weigh on the index, with materials and labor cost expectations at 30.4 each, suggesting persistent but stable escalation pressures. Productivity slipped to 50.0 from 53.9, hovering at the neutral line as efficiency gains proved harder to sustain heading into the summer months.